Event: The company released its 2023 three-quarter report. In the first three quarters of 2023, the company achieved revenue of 1,771 million yuan, +2.99% year-on-year, net profit of 28 million yuan, -77.43% year-on-year, and net profit of 52 million yuan after deducting non-return net profit of 52 million yuan, or -56.06% year-on-year. Among them, the 2023Q3 company achieved revenue of 493 million yuan, +0.77%/-37.34% over the same period; realized net loss of 7.19 million yuan; realized net loss of 7.19 million yuan; realized non-net profit deducted 250,000 yuan; 23Q3 sales margin was 17.22%, -2.30/-0.17pcts; net sales profit margin -1.46%, month-on-month -10.30/-6.58pcts.
Demand for household storage in South Africa has slowed and continues to be removed, while demand for electric bicycles in Europe has yet to recover. We estimate that the company's energy storage business achieved revenue of 495 million yuan in the first three quarters, +137% year-on-year, of which Q3 energy storage revenue was 55 million yuan, a decrease of 82% over the previous year. Among them, portable energy storage revenue was about 45 million yuan and household storage was about 210 million yuan. The decline in revenue was mainly due to the slowdown in African household storage demand and continued removal from storage. We estimate that the company's light power revenue for the first three quarters was 690 million yuan, -22% year-on-year, of which Q3 revenue was 220 million yuan, down 19% from the previous month, of which electric bike revenue was 110 million yuan and electric motorcycle revenue was 110 million yuan. The decline in revenue was mainly due to the fact that demand for electric bicycles in Europe has not recovered. Looking ahead to 23Q4, there is still pressure on households to remove storage from stocks in Africa, but the beginning of batch delivery of industrial and commercial energy storage is expected to contribute tens of millions of revenue increases, and the light power business is expected to achieve more than double digit growth on a month-on-month basis with the arrival of the peak traditional consumption season.
Consumer electronics batteries are growing steadily, and falling inventory prices and foreign exchange losses are dragging down short-term results. The company's 23Q3 consumer electronics battery revenue was about 180 million yuan, +14% over the previous year. The estimated annual revenue is about 670 million yuan, achieving an increase of more than 20%. The company's consumer batteries are mainly laptop soft pack batteries and emerging consumers such as robot vacuum cleaner batteries, etc., with steady growth. Prices of raw materials such as lithium carbonate declined sharply in 23Q3, and the company's inventory depreciation for batteries was 10.78 million yuan. In addition, foreign exchange hedging affected profit and loss of 6.27 million yuan, which dragged down overall performance. Q4 As consumption picks up and capacity utilization increases, profits are expected to recover quickly.
Investment suggestion: Considering the impact of household storage removal, we expect the company to achieve net profit of 0.59/2.05/300 million yuan in 2023-2025, which is -46.8%/+249.4%/+46.7% over the same period last year. The corresponding EPS is 0.59/2.05/3.00 yuan, giving it an “increase in holdings” rating.
Risk warning: demand for energy storage falls short of expectations; demand in the European market falls short of expectations; industry competition intensifies.